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Analysts estimate Interpipe’s railway product sales might slow down further in 2021 by 6-12% y/y to 170-180 kt. This is because in 2020, the company’s average sales volume was 18.8 kt per month in January-May (before the June 2 reinstatement of a 34.22% duty on imports into Russia), but fell to 14.0 kt per month in June-December (including 15.1 kt per month in 4Q20).
Even though the 34.22% duty for imports of Ukrainian railway products into Russia is set to expire on Jan. 22, there is a risk it will be reinstated in some form if Interpipe boosts its Russian sales volumes.
Furthermore, if Russia bans completely the imports of Intepipe’s railway products, which remains a risk, then the company’s sales volumes might experience a much deeper plunge in 2021.
The company’s pipe sales will remain related to oil prices (and thus to the coronavirus situation), and we tentatively expect Interpipe to be able to at least maintain its 2020 sales volumes in 2021.
At least in the first few months of 2021, and possibly longer, Interpipe’s business will experience the effects of the recent surge in steel prices. We expect this price surge to lift some pipe prices and therefore to be positive for Interpipe’s revenue and profitability.
9.2.12 ​Other sector corporate news
Firefly Aerospace Inc, a US rocket and space company, with deep Ukrainian roots, plans to raise $350mn to scale up production ​and work on a medium-class launch vehicle, Space News reports from Washington. “In the next five years we want to take Firefly from a $1bn company when we go out and fly Alpha,” Firefly’s CEO Tom Markusic, told an IPO webinar on Thursday. By developing Beta, a medium-class launch vehicle, Firefly aims in five years to become “a $10bn company.” Owned by Ukrainian-American entrepreneur Max Polyakov and his investment fund, Noosphere Ventures, Firefly hopes to launch its Alpha rocket this spring from Vandenberg Air Force Base in California.
Ukraine introduces sanctions against Chinese investor in​ ​Motor Sich​. Ukraine’s president issued a decree on January 28 to introduce personal sanctions against Skyrizon Aircraft Holdings Limited and its three related companies, as well as against Chinese citizen Jing Wang, the president’s website reported on January 29. The sanction actions include the freezing of assets (a ban on the use and disposal of property), a ban on any operations with securities, limits on trade operations, as well as a ban on official visits and cancelling permissions to enter Ukraine. Skyrizon is the owner of about 80% of the shares in Ukraine’s leading producer of aviation engines, Motor Sich (MISCH UK). Earlier in January, the US Department of Commerce ​introduced its own sanctions against Skyrizon​.
President Zelenskiy flatly rules out allowing Chinese companies to buy Motor Sich, Ukraine’s giant aircraft engine manufacturer. “We do not have the right to sell a controlling stake in the management of strategic defence enterprises of Ukraine to any country,” he told an Axios interviewer in Kyiv on Jan. 23. Asked if China would be allowed to buy the company, he responded: “Never, at least
80​ UKRAINE Country Report​ February 2021 ​ ​www.intellinews.com